The UN Development Programme (UNDP), the UN Economic Commission for Africa (ECA) and the African Peer Review Mechanism (APRM) have jointly welcomed recent upgrades of a number of African countries’ credit ratings by the global major ratings agencies. The UNDP, ECA and APRM are working together, under the leadership of the UNDP, on the Africa Credit Ratings Initiative (ACRI), to help African countries understand and appreciate credit ratings methodologies and systems, providing capacity-building, technical support and policy discussions to allow African officials to improve their data systems and so to effectively manage credit ratings.

“With over 260 officials from 18 countries trained, governments are now better equipped to negotiate with rating agencies, potentially shifting Africa’s global market narrative,” reported UN Assistant Secretary-General and UNDP regional director for Africa Ahunna Eziakonwa. “[Recent] upgrades of Ghana, Zambia and South Africa demonstrate Africa’s increasing creditworthiness and the efforts to strengthen institutions and macroeconomic stability.”

Ghana’s credit rating was upgraded in November by S&P Global Ratings from CCC+ to B-, as a result of improved liquidity and reduced risks. That followed Moody’s upgrade of the country in October, from Caa2 to Caa1, with a stable outlook. But the first upgrade of Ghana had been announced by Fitch, in June, from Restricted Default to B-, again with a stable outlook. These upgrades were the result of Ghana’s progress in debt restructuring and fiscal management, and especially a $13.1-billion Eurobond restructuring, which showed improved investor confidence.

Again, in November, S&P also upgraded Zambia’s credit rating from Selective Default to CCC+. This marked the country’s official exit from default, after five years, and followed important agreements to restructure some 94% of Zambia’s external debt (which totalled $13.3-billion). South Africa also received a credit ratings upgrade in November as a result of better-than-expected macroeconomic performance and better fiscal signals.

Further, Nigeria and Uganda received positive revisions in their credit ratings outlooks. These were the outcome of improvements in their fiscal consolidation efforts, external liquidity and their constructive engagements with the ratings agencies.

Moreover, and again in November, Guinea received its first-ever sovereign credit rating, from S&P. It was assigned B+.

“African countries have historically struggled with low ratings due to a lack of accurate data and poor coordination among national institutions,” highlighted ECA ACRI team member Jean-Marc Kilolo. “We hope that the initiatives from the three organisations will help overcome these challenges.”